Allardyce believes that if clubs continue to recruit overseas, the England team will suffer.
"We have to think British more, and be more selfish," he said.
"Far too many of us are thinking that because we have a worldwide brand that it is enough to just develop players from any nation. Far too many are brought to Britain from abroad to take up academy places in this country, which doesn't happen in other European countries.
"We say that we have to be fair to all. But if you go to Spain or Italy or Holland, you don't see that fairness in those countries.
"You don't see the integration of other nationalities into academies there. We need to be a little more selfish and pay more attention to developing our own.
Eventually the England side will be very poor because there are not enough players from which to choose.
"In the near future, if we are not careful, there will be even fewer from which to choose."